Human Capital Management M&A Pulse – Q2 2021

HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS

• Global M&A transaction volume within staffing, outsourcing services, and software and technology industries (collectively, “Human Capital Management” or “HCM”) increased 166% in Q2 of 2021 from last year, with 125 transactions completed. The impact of the ongoing COVID-19 pandemic recovery and potential future tax changes resulted in a strong uptick in Q2 2021, with buyers eagerly looking to engage their capital after a year of decreased investment activity.
• Strategic buyers continued to dominate M&A activity in the sector, accounting for 92% of industry transactions vs. just 8% completed by private equity groups (financial buyers) throughout Q2 of 2021.
• Staffing-related transactions comprised the majority of HCM deals, with 60 transactions completed across professional, industrial, healthcare, and IT focused staffing firms. All sectors of the HCM industry were positively impacted by the ongoing economic recovery in 2021, as Staffing transactions increased 150% and Outsourced Services transactions increased 136% in the second quarter of 2021 from Q2 of last year. Software and Technology transactions realized a 256% increase due to the overall outperformance of the sector relating to an increased reliance on tech-enabled virtual platforms.
• North America remained the most active region in Q2 of 2021, with 76 total transactions representing 61% of global HCM transaction activity. EMEA also remained active with 33 total transactions representing 26% of global HCM transaction activity.